Magna CEO says aims to appease VW on Opel deal

TOKYO - Canadian auto supplier Magna International said it plans to hold talks to appease Volkswagen, which has threatened to pull business from Magna if it goes through with an investment in Opel.

Magna co-Chief Executive Officer Donald Walker also told a media briefing in Tokyo he was unaware of any talks between it and China's Geely Group over a partnership on Opel, which were reported by Reuters and other media last week.

Earlier this month, General Motors agreed to sell control of Opel to a group led by Magna. Under the deal Magna and Russian partner Sberbank will each take a 27.5 percent stake while GM will retain 35 percent.

Magna has started to talk with its customers to assure them it would keep its supplier and automotive operations separate after the transaction, preventing the technology of its carmarking customers from being used in rival cars.

Most of the customers I have talked to personally want to know how we have a separation to protect technology but they have told me they are comfortable with it, Walker said at the briefing held to update the Japanese press on the Opel deal.

Specifically, Volkswagen have said they are concerned so we need to finalise the internal procedures and have more discussions with them. Walker said he had yet to meet Volkswagen. I think the next step will be to meet with them.

Detlef Wittig, head of Volkswagen's sales and marketing, recently warned that it would pull business from Magna in which its development know-how is involved. VW Chief Executive Martin Winterkorn has also raised concerns about the deal.

Analysts have said Magna's push into the auto business risks its $23 billion business with established customers. Magna's major customers include General Motors, Ford Motor Co, and Chrysler as well as Daimler AG and BMW.

Walker said Magna's main objective was to get a good return on its investment in Opel and not to compete with its clients.

It's very important that we clarify that Magna is not taking over Opel. Magna will remain as a parts company, Walker said.

GEELY QUESTIONS

Walker and a spokeswoman for Magna declined to confirm or deny talks with Geely over a potential partnership on Opel.

Talks between the parent company of Geely Automobile Holdings and Magna included the possibility of Geely taking a stake in Opel, but Magna is refraining from any such partnership for now, a source told Reuters last week.

I'm not aware of anything with Geely, Walker said.

Walker said Magna was interested in alliances in hybrid and electric vehicles, noting that Magna has been putting resources into related technologies and is currently working with Ford on the battery-electric Focus.

I foresee a lot of cooperation amongst the car makers and certainly with Magna on hybrids and electric vehicles. (Reporting by Nathan Layne; Editing by Lincoln Feast and Rupert Winchester)